Despite a burgeoning U.S. trade deficit in goods that has many worried about the future of domestic manufacturing, recently released import/export data from the United States government suggest at least one U.S. industry segment is still performing well: the nonwoven fabrics industry. Indeed, government-compiled statistics reveal that U.S. exports of nonwoven roll goods (categorized under Harmonized Tariff Schedule code 5603) hit another record high of 271 million kilograms (one kg = 2.2 pounds) shipped abroad (see Table 1) during 2006. But perhaps even more importantly, imports to the U.S. fell by nearly 5% last year for the first time in nearly a decade while export growth was up nearly 3%—the second year in a row in which U.S. exports grew by that amount.

And if that were not enough, exports also outpaced imports in terms of worth. As Table 2 illustrates, the estimated value of exported roll goods from the U.S.—as measured both by Free Along Side (FAS) value and General Customs Value —increased more than 12% in 2006, reaching nearly $1.4 billion in estimated worth last year—a new record. Meanwhile, imports witnessed a contraction in worth, going from a high of $712.7 million in 2005 to $703.3 million in 2006, or about 50% of the value of exports.

These data are especially significant because, up until last year, INDA, Association of the Nonwoven Fabrics Industry, had noticed that the gap between exports and imports of nonwoven roll goods was narrowing consistently every year since the mid-1990s. Between 1996 and 2005, for instance, imports more than quadrupled while exports grew a respectable but more modest 150% during the same period. The trend was so striking, in fact, that INDA staff repeatedly called it to the attention of U.S. government officials.

While it is still too early to tell if the 2006 data signals the beginning of a new trend, the continued growth in exports—coupled with the declines in the amount of imports—suggests there might be some room for cautious optimism for U.S. nonwovens producers.

Export/Import Markets

As Table 3 shows, nearly half of U.S. roll goods exported during 2006 remained in the U.S.-North America Free Trade Agreement (NAFTA) region, with shipments to Mexico and Canada increasing ever so slightly (not quite 3%) compared to 2005. Interestingly, exports to our NAFTA partners have tapered off since 2002, when nearly 60% of all exported roll goods from the U.S. remained in North America. Now, they only represent a little more than 46% of all U.S. exports.

So just where are these nonwovens going? Despite concerns voiced by some that the U.S. cannot compete against cheap Asian imports, a survey of the "Top 10" export destinations in Table 4 (which account for nearly 85% of U.S. exports) reveals that nearly 25% of U.S. exports of nonwovens were headed to places like China, Hong Kong, Japan and Thailand last year. China, in fact, was the third largest recipient of U.S. nonwoven roll goods in 2006, receiving nearly twice as many nonwoven roll goods than it did the year before.

In addition, the total number of export destinations for U.S nonwovens grew from 101 in 2005 to 109 in 2006, with 55 countries receiving more than they had the year before.

Further, some 25 countries received more than 1 million kg from the U.S., with some showing particularly dramatic gains, including China (up 85% to 37.1 million kg), Honduras (up 24% to 9.1 million kg), Korea (up 21% to 4.2 million kg), Taiwan (up 48% to 1.8 million kg), Colombia (up 32% to 1.2 million kg) and Turkey (up 38% to 1 million kg).

A number of other countries posted remarkable gains in the amount of nonwoven roll goods they received in 2006. Tanzania, for instance, saw nonwovens shipments from the U.S. grow by nearly 1200% compared to the previous year, going from less than 70,000 kg to almost 900,000 kg, while exports to India nearly doubled, reaching more than 930,000 kg in 2006. Other notable gains include Moldova (up 255% to 210,818 kg), the Bahamas (up 389% to 99,773 kg) and Nicaragua (up 310% to 89,793 kg). And, while few would characterize these countries as major export destinations for U.S. nonwovens, roll goods made noteworthy (albeit curious) gains in places like New Caldonia, which received more than 46,000 kg in 2006, up almost 600% from the year before, and Angola, which imported more than 32,000 kg in 2006, some 745% more than it had the previous year.

On the import side, 56 countries sent nonwoven roll goods to the U.S. in 2006, with 25 of these countries shipping more nonwovens to the U.S. than they had the year before. At the same time, however, 36 countries posted losses in 2006, with shipments from places like Turkey and India falling by almost 50% or more. These losses might at least be partly explained by the fact that countries like China (which emerged as the largest source of foreign nonwovens in 2006) may be eating up some of their advantage.

But China was not the only nation to post dramatic gains in 2006. Imports from the Czech Republic, for instance, again grew dramatically in 2006 (rising from 1.5 million kg to 4.8 million kg), while nonwoven roll goods shipments from Taiwan to the U.S. were up by 225% (from 1.1.million kg in 2005 to 3.4 million kg). Also interesting is the fact that Korea ousted the U.K. from the Top 10 list of countries sending nonwovens to the U.S., marking the first time U.K. shipments have contracted in years (falling from 6.4 million kg in 2005 to 3.3 million kg), while Korean shipments grew nearly 35% (going from 3.6 million kg to 4.8 million kg in 2006). This is particularly noteworthy because the U.S. recently concluded a bilateral free trade agreement (FTA) with the Republic of Korea, which, if approved by the U.S. Congress, could spur even more imports from Korea.

Conclusions

While the 2006 export/import statistics are encouraging for the U.S. nonwovens industry, they also highlight the fluctuations and inherent volatility of global markets. This means that U.S. nonwovens producers enjoy the status of being the reigning global leaders in the industry, even though they should remain cognizant of the fact that the global market's volatility means there will likely be new winners and losers every year. To see to it that the U.S. remains the clear winner, domestic firms should focus on further developing the characteristics that have made our industry one of the bright points of U.S. manufacturing: efficiency, adaptability, quality, innovation and market foresight.

World trade liberalization and global market access also seem to be a critical component for our industry's success. For its part, INDA will continue to press the U.S. government to seek opportunities for eliminating duties on nonwoven roll goods, reducing other trade barriers and communicating member concerns to officials when barriers prevent free and fair trade.